Mortgage Rates Are at an All-Time Low The new year will likely continue to bring some challenges. However one positive note rising above all the challenges, are the recent average mortgage rates. Mortgage rates are at an all-time low. These rates recently finished their 20th consecutive week at below 3%. Even more encouraging, the average U.S. mortgage rate for a 30-year fixed loan recently fell to 2.66%. This is the lowest rate in the nearly 50-year history of Freddie Mac’s Primary Mortgage Market Survey. In addition, the average rate for a 15-year fixed-rate mortgage recently fell to 2.19%. Now more than ever, refinancing or purchasing a new home is looking better than ever. Refinance Those looking to refinance their mortgage are now in a unique period of time. Now, they can take advantage of historically low interest rates. In 2020, some households simply focused on maintaining the status quo. However, with the new year, the possibility of increased growth and change may be more plausible. Homeowners may feel a bit more comfortable making changes to their current financial status. For some, this will translate into taking advantage of the attractive interest rates offered by both 30 and 15-year fixed-rate mortgages. This means homeowners can either more quickly pay off their mortgage and/or increase the amount of their monthly disposable income. The latter is particularly attractive for those who may be expecting only a small annual raise in the upcoming year. Purchase Initially, 2020 saw a slump in home sales due to stay-at-home orders and other restrictive measures, although eventually home sales did rebound. In the last weeks of 2020, the number of purchase loan applications actually exceeded year-ago levels for 29 weeks in a row. In fact, at this point cumulative purchase applications have exceeded even 2019 levels. This trend is likely due to the decrease in mortgage interest rates, and home purchases are expected to remain strong as interested home buyers try to lock in these attractive interest rates. Record Low Rates – Gone too Soon? While rates have been dropping and currently are at record lows, there could be some reasons why these drops may gradually reverse over the course of 2021. A recent Fox Business article discusses two reasons why those interested in purchasing or refinancing a home will want to keep a close eye on the direction of mortgage interest rates. An Improving Economy - While 2020 inflicted significant damage to the economy, overall, the global economy is recovering faster than expected. In addition, while unemployment rates did rise at least in the early months of 2020, they did not remain high as much as expected. Vaccines may Save the Day - Probably no other variable could make as much of a positive impact on the U.S. economy than the continuing distribution of the vaccines for COVID-19. As the weeks turn into months and the vaccine becomes more widely available, along with an improvement in the weather, the economy will continue to improve. This will increase the demand for employment, which in turn usually spurs on the housing market. So what do these two insights mean for refinancers and potential homeowners? It means that right now and at least for the new few months, it could be the best time ever to purchase a home or refinance one’s current home. Home Prices for 2021 Another factor to consider when buying a home are the current and likely trends in home prices in the future. Home prices in 2020 saw a strong upward trajectory, likely due to the increased demand for budget-friendly homes. For 2021, Realtor.com is still predicting a growth in home prices (5.7%). However, this figure is much more encouraging than the double-digit increases seen in 2020. Summary With 2021 looking as if the economy will steadily improve. This means mortgage interest rates and home prices may turn upward as well. Now may be the ideal time to contact us for a personalized mortgage solution. low mortgage rates mortgage mortgage rates mortgage rates all time low Atlantic Home Mortgage Alpharetta Click to Call or Text: (888) 309-4643 This entry has 0 replies Comments are closed.